Show notes: http://optionalpha.com/show125 Want to learn how to trade options the right way but feeling overwhelmed? It's like this big giant elephant is standing in front of you and you have to figure out a way to consume it. And the best way to do anything in like, like eating the proverbial elephant, is to tackle it one bite at a time. So today, I want to introduce two ways of learning how to trade options; the first using frameworks, and the second using concepts. Both are effective ways to ...
Apr 09, 2018•29 min•Ep. 125
Show notes: http://optionalpha.com/show124 Selling cheap options with very high probabilities of success makes rationale sense on the outside. I mean, why sell options with a 70% chance of success when you can sell options further out that have a 90% chance of success. No brainer right? Well, not so fast. The options market is fair and efficient - and selling these far out-of-the-money options might look good from a win rate perspective, the total dollar profits you'll generate far under-perform...
Apr 03, 2018•25 min•Ep. 124
Show notes: http://optionalpha.com/show123 At Option Alpha we believe (and the research confirms) that the options trading possibilities for retail investors are nearly endless. Higher returns and better performance for your portfolio, but only if, you cross this one trading bridge first. So many newbie traders learn about options and the stock market and experience a rush of energy and motivation to jump in with both feet and start trading. Naturally, this jolt comes from the expectation of hug...
Mar 26, 2018•21 min•Ep. 123
Show notes: http://optionalpha.com/show122 As options traders we need to focus on the levers that really move the needle in terms of generating income and cash flow for our portfolio. There's no point in doing something if it doesn't contribute to the overall profitability of the portfolio right? It'd be like shoveling your driveway before a huge snow storm. Or washing your car before it rains. The wrong activity for the sake of being active serves no purpose. Today's show resets the foundation ...
Mar 22, 2018•33 min•Ep. 122
Show notes: http://optionalpha.com/show121 Trade long enough and save enough money and eventually, you'll need to make a couple small tweaks to your options strategy as you start managing larger trading accounts. Today's show is all about transitioning your options strategy in a way that optimizes the increased capital you have to invest. If you're not yet at the "large account" level we talk about, don't worry. One, you'll get there over time if you stay committed. Two, the concepts are importa...
Mar 15, 2018•26 min•Ep. 121
Show notes: http://optionalpha.com/show120 Over the last 10+ years I've seen thousands, and coached hundreds, of traders navigate the markets. And if you study option trader success long enough (and geek out about it as much as I do) then you'll quickly come to realize that success is nothing more than a persistent person with great habits and a clear mind. Today's show focusing on why I believe some traders are frankly always more profitable than others while re-visiting six key areas that diff...
Feb 26, 2018•25 min•Ep. 120
Show notes: http://optionalpha.com/show119 The last couple weeks of trading for many newbie investors was quite the learning experience. The market fell from all time highs quickly and then recovered nearly half of that move in a single week. Still, we got a flood of emails from people who were not well positioned for the drop in equity prices and learned the hard way why you can't practice trading options with large, one-sided trades. One unfortunately person placed a single $6,000 trade in a $...
Feb 23, 2018•27 min•Ep. 119
Show notes: http://optionalpha.com/show118 It's always good to look back and analyze what happened in the past. Often times it can help shape the future (good or bad) and how you trade moving forward. In today's show, I want to take some time to share my top five options trading psychology lessons I learned over the last 18 months. Many of these I scripted out well before the recent mini-crash we saw in equities so it's fitting to talk about now because my comments might not have hit home withou...
Feb 10, 2018•24 min•Ep. 118
Show notes: http://optionalpha.com/show117 One of the most popular and widely used options greek is Delta. And while I believe that you can't necessarily learn about option pricing and option greeks in a vacuum as they all work together to represent potential price action for changing market conditions, having a solid understanding of how Delta works is important both in entering new positions and managing your basket of trades in a portfolio. Today's show dives a little deeper into the lead gre...
Jan 22, 2018•30 min•Ep. 117
Show notes: http://optionalpha.com/show116 You've targeted a stock or ETF setup you like and want to make a directional trade. Maybe some technical indicator alerted you to a possible turn in the underlying or you just needed to hedge your portfolio with a new trade. Whatever the case, you are now left wondering why type of options strategy to pick. How do you decide between trading debit spreads vs. credit spreads and when should you use each style? In today's podcast, I'll walk through the dif...
Jan 15, 2018•19 min•Ep. 116
Show notes: http://optionalpha.com/show115 As with many things in life the 80/20 principle can help guide and focus our attention on the most important aspects of options trading. In particular, trade entry and executing an options order correctly is critical to your success. I've often said that great entries save you from having to be good at everything else, like adjustments and rolling contracts. Today, I want to help you avoid five of the big mistakes you can fall subject to when placing a ...
Jan 08, 2018•24 min•Ep. 115
Show notes: http://optionalpha.com/show114 Short straddles and short iron butterflies are some of our most profitable option strategies, and a consistent staple when trading in our PRO and ELITE membership levels. However, when it comes adjusting these positions and going "inverted" it can cause even the most experienced traders to freeze up. In today's podcast I wanted to walk through the process of managing inverted option positions and help you understand what numbers to track and how the pri...
Jan 01, 2018•43 min•Ep. 114
Show notes: http://optionalpha.com/robinhood Often times people ask me why I continue to run Option Alpha and give away so much free content, courses and training when we could easily charge for it? And the simple answer is that I'm in it for the relationships I build, the people I meet, and the investors lives we change by teaching them how to have more confidence and place smarter trades. Today's guest needs no introduction in the investing world as the company he co-founded is the fastest gro...
Dec 30, 2017•34 min
Show notes: http://optionalpha.com/show113 Often times when new traders go through their first couple earnings cycles and experience large moves in the underlying stock, it can feel almost natural to want to buy contracts via a long straddle earnings option strategy as opposed to selling options the way we teach here at Option Alpha. In today's show, I'll preview some of the new research we've been doing in the field of earnings trading and cover the results from three major companies we backtes...
Dec 25, 2017•34 min•Ep. 113
Show notes: http://optionalpha.com/show112 Depending on where you started your options education, trade frequency was either glossed over or talked about in-depth. Here at Option Alpha, we've suggested for almost a decade now that to find success you need to be placing trades almost daily. But does this frequent trading activity classify us as "day traders" in the options market? If so, what are the implications that could impact your account? If not, how do we increase our trade frequency if we...
Dec 18, 2017•21 min•Ep. 112
Show notes: http://optionalpha.com/show111 You made an options trade and the position has gone well, leaving you with a nice fat profit as expiration approaches. Now the question becomes, what do you do with these cheap out of the money option contracts you sold? Do you buy back your penny options or let them expire worthless? Are there risks to do one over the other and when should you lean one way or not? On today's show I'll talk through what our research shows about exiting trades early, whe...
Dec 09, 2017•28 min•Ep. 111
Show notes: http://optionalpha.com/show110 Why do we still believe that magically someday we'll have some inside scoop or tip that alerts us to market tops and bottoms? As hopefully rationale adults we often get lured into a false sense of understanding in the financial markets brought on mainly by the media and talking heads. Today I want to help you become a better options trader by not watching the market, focusing and more systematic trading setups, and providing the single most important ca...
Nov 21, 2017•24 min•Ep. 110
Show notes: http://optionalpha.com/show109 Unlimited risk option strategies get a bad rap in the investing community among newbie traders. And while our backtesting research has shown that unlimited risk positions like short straddles and short strangles generate the best overall returns, you might be restricted in trading them because of your account type or just fear the big potential drawdowns. In either case, on today's podcast I want to conceptually walk through how you could covert these s...
Nov 07, 2017•25 min•Ep. 109
Show notes: http://optionalpha.com/show108 If you trade options longer than ten days you'll undoubtedly run into a scenario where you get challenged by a stock moving either higher or lower against your position. When this happens the first question many people ask is "Do I start rolling up strike prices and adjust the position or work on closing out the trade completely at a loss?" Naturally, we are in the camp where we believe, and our backtesting confirms, that rolling your strike prices clos...
Nov 03, 2017•29 min•Ep. 108
Show notes: http://optionalpha.com/show107 Today I've very excited to bring one of our very own Option Alpha family members on the show, MACDDaddy aka Robert. He's been a member for many years and someone I continue to seek advice from in many areas. During the show we'll dig deeper into the "Wheel Selling" option strategy which has created some fairly long and in-depth forum threads lately and warrants a little more attention from our weekly podcast....
Oct 10, 2017•34 min•Ep. 107
Show notes: http://optionalpha.com/show106 As some point or another new option traders worry about their option contracts being assigned. Namely short call options getting short stock assignment. But it's never as bad or horrifying as it may seem and in today's latest show I want to walk through our TLT iron butterfly trade in which we ended up getting assigned 200 shares of short stock just days before expiration.
Oct 06, 2017•26 min•Ep. 106
Show notes: http://optionalpha.com/show105 The further the markets continue to run higher, the greater the risk that another major market correction or market crash will happen in the near future. After all, as we pointed out in Show #15, the stock market has fallen 9 times at least 30% which is once every 10 years. Right now we're riding a 10-year bull rally that's losing steam fast. So, how do you protect your portfolio in a down market? That's the question and today's show will give you the a...
Sep 19, 2017•28 min•Ep. 105
Show notes: http://optionalpha.com/show104 On today's newest podcast I want to turn the conversation a bit and focus on pairs trading with options. And this isn't the traditional pairs trading that you might have heard about before where you short one stock and buy another related stock to profit from any trending differences or divergences in the underlying price. Instead, I want to talk about how you can use some very basic portfolio and stock beta concepts to make smarter, more efficient deci...
Sep 15, 2017•31 min•Ep. 104
Show notes: http://optionalpha.com/show103 Even after discussing and outlining the general process for how to pick the right stock options strategy in previous podcast and videos, I continue to get members who are confused how it should work and the steps one might take. I ultimately believe that in most cases you might be over-thinking it especially when it comes to choosing tickers and market direction. Today's podcast should help clear the air while also giving you concrete examples using a s...
Sep 02, 2017•31 min•Ep. 103
Show notes: http://optionalpha.com/show102 When selling options, often I get a question or inquiry from members of our community with regard to how far out of the money we should sell our options and set our positions. Now, I typically target around the 70% probability of success area for my short option selling trades, but others have often wondered that if given the choice why we don't just sell options at the 90% probability of success level? I mean if 70% is good, 90% has to be better right?...
Aug 26, 2017•29 min•Ep. 102
Show notes: http://optionalpha.com/show101 I believe that on some level every new trader dreams of trading options full time and not working a regular job. The reality is however, that you're need a lot of capital before you make the leap to full time trading and that means you'll have to learn how to effectively trading options while working your day job. Hard as it may seem at first, working full time and trading options is not that complicated nor is it impossible if you're smart about your t...
Aug 02, 2017•35 min•Ep. 101
Show notes: http://optionalpha.com/show100 Not only is today special because we're releasing our newest research report called The Profit Matrix but also because as soon as this show goes live we'll have crossed more than 1,000,000 downloads on the podcast. Crazy coincidence but it's true and very humbling, so thank you to all of you who have supported and listened over the last couple years. In this special show, we're going to talk in-depth about our new game-changing research report in which ...
Jun 16, 2017•43 min
Show notes: http://optionalpha.com/show99 The investing world in the next 5-10 years is going to look dramatically different. In fact, the shift to automated trading is already happening at the highest levels and with the biggest hedge funds. So, why is this happening? Why can't we just ignore it? And what can we do now to position ourselves to take advantage of automated trading systems now? Today's show is very high level but I think you'll enjoy the topic but it's a big wave of change that's ...
Jun 14, 2017•28 min•Ep. 99
Show notes: http://optionalpha.com/show98 The markets are evolving faster and faster as the introduction and use of computer-driven or data-driven trading systems start to hit exponential growth rates. So, the question becomes, is this the end of systematic risk and market uncertainty? To put it bluntly, no - in fact, never will we reach a point at which there isn't some sort of systematic risk that we have to price into our options trading. And these future expectancy models are where the oppor...
Jun 10, 2017•29 min•Ep. 98
Show notes: http://optionalpha.com/show97 Today we're going to use our new Trader's Toolbox and options backtesting software to test win rates when selling options. Because the truth is many people have this huge "rub" with options trading and expected vs. actual win rates. They assume that if we place a new trade with an initial probability of success of 70% that the trade will win at exactly 70% over the long-term. As you'll see today, that's just not the case when you account for the implied ...
Jun 08, 2017•25 min•Ep. 97
